Is there a way to auto update or reproject newly added vertices on a shrinkwrapped mesh?
Q. What is the workflow to setup retopolgy with SubD in Blender?  

A.


Create your reference mesh:


In the Properties Editor> Object tab> Display panel set Maximum Draw Type to Solid.

Create your retopo mesh:


Create a plane as the beginning of your retopology mesh and name it.

Setup X-Ray for retopo mesh:


In the Properties Editor> Object tab> Display panel enable X-Ray.

Setup Sudivision Surface Modifier for the retopo mesh:


Add Subsurface Modifier.
Enable Adjust edit cage to modifer result icon.
Subdivisions level to 2 or whatever is desired.

Setup Shrinkwrap Modifier for retopo mesh:


Add Shrinkwrap Modifier with defaults.
Set the Target to the reference mesh.
Enable Adjust edit cage to modifer result icon.

Setup Snapping to Faces for retopo mesh:


In the 3D View header, enable Snap during transform and set the
Snap Element to Face but leave off Project individual elements on the
surface of other objects.

Setup a viewport material for the retopo mesh:


In the Properties Editor> Material tab, add a new material.
Give it color like bright green or whatever you desire.
Copy the material color (hover over it and press Ctrl+C)
Go to the Material tab> Settings> Viewport Color, hover over it and
paste (Ctrl+V).



Update: I discovered that if your shrinkwrapped mesh is misaligned in certain areas, a quick fix is to apply the shrinkwrap modifier and then add another shrinkwrap modifier and set it up again. All the misaligned points will be fixed without having to move them around individually in order to get them to update.